The above settings change in VLC worked!! I can play nearly all 1080p content that I have downloaded Yay! Thanks sooo much! I have been looking for a solution for about 1 year now... wow so easy. I still cant play a high bit rate BBC HD documentary on China, but that is only one. I can play madagascar 1080p mkv, back to future 1080i TS, shrek 1080p mkv (skipped once), heroes 1080p mkv (FINALLY).
I have a 2.0Ghz Intel Core duo with self-upgraded ram to 1GB. I have always been able to play all 720p, but VLC would crash when skipping around in the timeline of videos or fastforwarding. When I upgraded RAM, this diminished. Also, I found from testing that the mac mini hard drive sometimes cannot keep up with the data rates of HD movies. SO, now I server data off of a linux server via samba shares through a gigabit ethernet line, switch, and NICs on both. Now, I can stream/copy content across the network at up to 36MB/s! The highest I have seen it go while watching a movie was around 20MB/s, but usually at <1MB/s. If you go this gigabit route, make sure to get 1000MB capable server NIC, 1000MB capable router or switch or switch behind router(best), and 1000MB rated ethernet lines.
See my setup details at:
http://nickyeates.com/personal/blog/mac ... tpc_review
There are a million options in VLC ffmpeg, all with mouse-over explanations. I am sure that you could enhance the speed by sacrificing quality even more so than just the above settings. Also, I think that upscale or downscale may cause a slight bit of CPU on mac minis cause they have --please stay polite-- graphix chip; maybe try messing with different resolutions if you are pressed for that last bit of CPU power.
Also, I think you can overclock mac minis, and I know for sure that you can upgrade mac mini CPUs to 2.4 Ghz. There are tutorials out there to do that.